Customers wanting to bank on the move should be aware of potential risks, according to the early findings of a review of the mobile banking market due to be published next year by the Financial Conduct Authority (FCA).
The FCA has highlighted possible risks to consumers of using mobile banking, including fraudulent access to mobile banking accounts, and the risk of consumers receiving malware or a virus when downloading a mobile banking application.
It also cites the potential risk of a systems failure, or an IT problem, preventing consumers from accessing their accounts.
Mobile banking on the rise
Mobile banking is becoming increasingly popular, as consumers use their smartphones and tablets to make contactless payments, transfer money and monitor their accounts.
However, the FCA also points out that, as mobile banking services are relatively new to consumers and they are not yet familiar with them, the risk that payments will be made in error, for example, paying the wrong person, or the wrong amount, is higher.
How can consumers protect themselves?
The FCA suggests a number of common sense steps consumers may want to consider when using a mobile banking service:
- It’s worth making sure if you lose your phone, others can’t easily gain access to your mobile banking account by using security settings to require a password or pin code to get in.
- Be careful not to enter incorrect account details when making payments. The FCA points out this is made more likely as the results of smaller keypads and because consumers may be making payments at unusual times.
- It also suggests that consumers make sure they have sufficient protection against the possibility of downloading malware or viruses on their smartphone.
Why is the FCA looking at mobile banking?
The FCA is undertaking a full review of mobile banking services which will cover mobile phone networks as well as high street banks. The final report is due to be published in the first half of 2014 and will set out the possible risks to consumers, and the areas that firms should consider when developing their services.
Clive Adamson, director of supervision at the FCA, said: ‘Mobile banking is an exciting development in financial services, with increasing numbers of consumers attracted to the convenience of banking on the move.
‘With the marketing growing, now is the right time for us to take stock and, as part of the FCA’s forward looking approach, to ensure that consumers are appropriately protected’.